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5 Tips to Save Your Business From Ruin

drowning hand depicting business going under

Anthony Furgison | Dreamstime.com

By    |   Monday, 29 October 2018 12:07 PM

Money is an important aspect of any business venture. You may hold the opinion that in order to make money, you have to spend money.

While at face value, this may seem correct, but a critical look at the statement will reveal that it’s not a universal truth. This position has been debunked by some that to make money you don’t need money, what is required is leverage.

It’s safe to say both positions are correct and an obvious fact is that money is important for starting a business and its continued existence and survival, be it your money or someone else’s money.

Startups are more likely to fail than succeed. Several factors account for this dismal conclusion: from not having a proper evaluation of the venture to spiraling cost and having a product no one wants to buy. The factors are numerous and can ruin any business venture.

Here are five tips to save your business from ruin:

  1. Get to the Crux of the Matter. When your business is going in an undesirable direction, you don’t sit back and wish for the desired situation. The initial thing to do is to find out what is going awry. Whatever it is, get down to the root of the problem. Don’t assume and make irrational business decisions. When you’ve identified the issues, tackle the problem head-on.
  2. Tackle the Problem of Cost and Pricing. As a business owner, you should be able to find a balance between what it costs you to provide your product and what the appropriate price people are to pay for it.This can ruin your business if you’re unable to sort it out. Setting the price too high, your product may not be competitive in the market except if you operate a monopoly. Set it too low, your profit won’t be enough to cover your cost. In order not to scare away your customers and, at the same time, not operate on a loss, you have to fix a price that’ll facilitate product and service turnover.
  3. Have Realistic Expectations. People are in the habit of overestimating the value and success of their product. This is why it’s important to conduct a proper survey and market research, preferably by a professional. This should, however, serve as a guide and put a check on expectations in the shortest period of time. According to some psychologists, the biggest unrealistic expectation is that people shouldn’t have such unrealistic expectations. Unrealistic expectations are potentially damaging because they set us and others up for failure. They can chip away at our relationships, shut down our goals and even steer our lives in an unhealthy direction. Have realistic expectations that can be evaluated and devise ways to ensure your business not only succeed but also live after they’re gone.
  4. Have a Good Team. What happens to you when your business is struggling? Some business owners may have the composure and bravery to revive such business. But some may not actually know the next step to take. There’s no wisdom in consulting family members, friends,and other individuals when you’re making plans for vacation, health insurance plans, wedding plans, education plans, insurance plans etc. but try to go solo when it comes to strategic, tactical, operational and contingency planning which is critical to your business success. Get a good team and brainstorm on the challenges your business is facing. You’ll be shocked that an intern can come up with an idea that’ll revive your failing business.
  5. Check Waste and Work Input. Just as bit by bit sales and profit culminate to business success, little by little waste culminates to business loss. Waste of any kind, be it from employees’ mistakes or mechanical malfunctions can ruin businesses. On the other hand, work inputs; employees and machines, have great consequences for every business. When work inputs are carefully evaluated to ensure that daily targets are met, then your business may not actually detect deviations from plans and redirect employees’ effort to set goals and objectives.

One way to tackle these anomalies is making your employees be accountable for silly mistakes and proper maintenance of equipment to reduce waste. Performance management approach should be embraced to ensure that work inputs are daily evaluated for proper business decisions.

Richard Agu is a researcher, entrepreneur and freelancer, passionate about entrepreneurship and self-development. Currently, Richard writes for Entrepreneur.com, Goodmenproject.com, among others. Follow him on Linkedin.com by clicking here now.
 

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RichardAgu
One way to tackle these anomalies is making your employees be accountable for silly mistakes and proper maintenance of equipment to reduce waste.
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2018-07-29
Monday, 29 October 2018 12:07 PM
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